The second (or third) time around: How Financial Advisors Got to where they are from other fields

F.Scott Fitzgerald wrote, "There are no second acts in American lives." Fitzgerald was wrong about Americans. And he was strikingly wrong about financial advisors.

"I would imagine that a good percentage of people in the industry have come from somewhere else," says New York-based Jeffrey M. Franklin of Life and Wealth Planning, who started out as a chemical engineer.

Franklin is right. Only 11% of advisors told Cerulli Associates last year that planning was their first career. While 26.8% had previous careers in other financial fields, the rest started elsewhere. Many had multiple jobs in different occupations before turning to financial planning.

Initial career choices often turned out to be disappointing. Franklin's first job at an oil refinery was less than he expected. "The work itself was not that exciting," he says. As with many young people, he thought he would be given more responsibility and authority from the beginning. "We all think that we can take the world in one bite," he says. Instead, it was "pay your dues and wait your turn."

SWITCHING OFF FROM TV

Others find that the initial excitement of an early career choice begins to dissipate as conditions in that field change. Don Grant, now an advisor with Morgan Stanley Smith Barney in Wichita, Kan., says the TV broadcasting business he entered as a young man was very different from what it later became. "It's bottom-line driven," he says. Most local TV stations, Grant says, are owned by entities outside their communities. "Resources are stretched thin," he says. "Nobody has a beat anymore, so you have to become an instant expert."

Grant's transition to planning was a logical extension of the expertise he had developed over the years. In each market where he anchored a newscast or reported stories, Grant often covered business and finance. He created a weekly business-oriented program at many stations. "I could educate people on things that I think are very important," he says. "I believe that we are woefully undereducated as Americans about financial matters."

He tired of the broadcasting business in his early forties and wanted to stay in Wichita with his wife and two daughters. That's when he made the switch to planning. "I had some name value," says Grant, who had been on TV in the area for four years. But that didn't immediately translate into credibility as a planner.

"They would take my calls and they would give me the courtesy of listening because they knew who I was," he says. But the numbers were not encouraging. For the first two years, he says, he was a fifth quintile producer. He jumped to the first or second quintile when people began to realize he was serious about his career change and that he was "here for good."

Grant contends that because he had three dependents and was starting out in planning as a midlife career change, "failure was not an option." One measure of his success is that he now represents the profession as one of 27 CFP Board ambassadors.

TRYING ON MANY JOBS

Among career switchers, 4.2% of advisors come to the field from education, according to the Cerulli study. Atlanta-area planner Mark DiGiovanni of Marathon Financial Strategies was one of them. After college, DiGiovanni taught shop for five years. Although he enjoyed teaching, he says now that he realized that he valued "opportunity more than security."

DiGiovanni went back to school for an M.B.A. and took a job in the hotel business. "Hotel management taught me what I didn't want to do," he says.

He became an insurance underwriter. DiGiovanni also finished his M.B.A. and passed the CPA exam. Increasingly, co-workers at the insurance company were asking him for informal financial advice. He started to wonder if there was a way to make a living doing that.

"I really didn't want to be a CPA," says DiGiovanni, who likens that profession to being a referee at a sporting event. "I would rather be the coach than the referee," he says.

A relative through marriage who worked for a brokerage firm in Atlanta connected DiGiovanni with people who helped him get started on the road to financial planning. "It was a very good fit for me," he says.

Like many starting out in the planning field, DiGiovanni found the initial financial rewards were not that great. He realized that he probably would not have any net income the first year and that it would take five years to get back to what he was making before joining the planning world.

DiGiovanni credits his "very supportive wife" who stayed in teaching while he pursued a career switch. As a result, he says, "We had a floor of income."

HELPFUL SPOUSES

For many people making the transition to planning, a working spouse can make a big difference. Sunit Bhalla, who spent 18 years as an R&D project manager and software developer at Hewlett-Packard and Agilent Technologies, credits his wife with both prompting his switch and making it possible.

Bhalla, whose OakTree Financial Planning is based in Fort Collins, Colo., says he was always interested in financial information and started thinking about making a change while he was working in the software field. One day, his wife asked a key question: "If you're 75 and never made the change, would you regret it?"

Bhalla started working on a business plan. With three children, his wife's work as a project manager for an electronics manufacturer made the change possible. "It would have been hard to switch without having that steady income and also the health insurance," he says. "The lack of pressure helped me develop my business."

Bhalla's early interest in finances while toiling in a different field is common among people who make the switch to planning. After leaving chemical engineering, Jeff Franklin worked for an internal management consulting group with the City of New York.

Franklin managed to find work at Citibank, though in a job that had little to do with finance. Meanwhile, he regularly read J.K. Lasser's tax books to make sure he didn't overpay the IRS. And he ran his own investment portfolio.

When he met a friend of a co-worker's who was a CFP, he had an awakening: "I can do my hobby as my work and have people pay me to do this!"

A FATHER'S PUSH

Joseph Kelly, a Bordentown, N.J., planner with Valic Financial Advisors, also has had a lifelong interest in stocks and bonds. He majored in economics and took over the family liquor store when his father had a brief illness and then retired to Florida. Kelly said that his father didn't pressure him to take over. He simply said, "Why don't you just try this for a year and see how it goes?"

Kelly ended up running the liquor store for 27 years. And most nights, he would go home and read financial publications. "That's how I relaxed," he says.

In 2005, just before he passed away, Kelly's father again offered some career advice: "In the second part of your life, why don't you do what you've always wanted to do?"

At age 51, Kelly sold the liquor store and took a year off. After he tired of his temporary retirement, a friend who owned an insurance agency and held a brokerage license agreed to sponsor him for the Series 7 and Series 66 tests.

He worked with the agent for a few weeks, then took and passed the tests. Soon after, he took the Series 24 test and passed that too. After working for about a year with his friend, he met a Valic employee and was offered a job.

He decided to study for his CFP after his son, who runs a software company, told him that he didn't think Kelly could pass the test. He did on his first try.

A WRONG ORDER

Serendipity is often a factor in career moves. Joel Redmond's mistake on an order form led to his financial career. Redmond, of Syracuse, N.Y., was working in telephone sales for a company that sold networking equipment. To ask the right questions, Redmond would order annual reports from a Dow Jones service.

"I circled three of them, because I wanted three companies." But instead of companies, he mistakenly ordered annual reports for three industries. Redmond received hundreds of reports. He started looking through them and realized that he could help people with investment information.

"In the back of my mind, something turned on," he says. Redmond joined a brokerage house in 2004 and is now a planner with Key Private Bank.

The switch to financial services from technology sales wasn't the first change for Redmond. "I always liked to write," he says. His first big job was editor and photographer at a small-town newspaper in upstate New York.

Although he loved his work, he knew that he would have to move to a big market to make an adequate living. He switched to sales before eventually finding his place in financial planning.

Franklin believes that engineering taught him how to think logically. He uses the example of someone who wants to cross a river. Simply saying you want to get to the other side does not define the objective well enough. How often will you travel? How fast? Alone or with other people? With goods? Solutions range from swimming to a rowboat or ferry, a pontoon, a bridge or tunnel. All are potential solutions. "They are neither right nor wrong," Franklin says. "They are either appropriate or inappropriate."

WHAT IT TAKES

Kevin Keller, CEO of the Certified Financial Planner Board of Standards in Washington, D.C., believes a good practitioner combines analytical skills with the ability to communicate. "I think it's that balance between the left brain and the right brain that makes for successful financial planners," he says.

Advisors who have come from careers in other disciplines often have analytical and communications skills honed by their experiences in those seemingly disconnected occupations. For many, it's the second, third or even fourth tries at finding their place in the job world.